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Asian Market wrap: Stock Markets moved mostly higher during the Asian session, with Chinese Stocks outperforming after the Central Bank said in comments following the monetary policy committee that it will use comprehensive policy tools to keep economic developments steady and stabilize market expectations, thus underpinning hopes for a loosening of liquidity conditions. The CSI300 rallied 1.41%, Shenzen Comp and Shanghai Comp are up 1.53% and 2.52% respectively. The Hang Seng managed a 1.42% rise, while Nikkei posted more muted gains of 0.09%, as trade concerns continue to cloud over sentiment. The dovish Central Bank comments saw 10-year yields falling -4.6 bp in China, while elsewhere yields picked up as stocks improved. 10-year Treasury yields are up 1.8 bp at 2.855%, 10-year JGB yields gained 0.3 bp to 0.026%. US Stock Futures are also moving higher and the WTI Future is trading at USD 73.24 per barrel. UK Stock Futures are also moving higher. Data releases so far have not been stock friendly, with UK Consumer Confidence and German Retail Sales falling and German import price inflation rising sharply. Still to come are Eurozone HICP and German jobless numbers as well as UK lending data and the Swiss KOF leading indicator.

FX Update: Both the Dollar and Yen have weakened against most of the other main currencies, with the Yen underperforming, while the Euro outperformed on meeting some strong demand on news that EU members had thrashed out the deal on immigration. The deal aims to shore up external borders and create screening centres for migrants, which is seen as placating the Italian populist government. EURUSD flipped back above 1.1650, rallying by a big figure in total before capping out at two-day high of 1.1666, and most Euro crosses concurrently rallied, too. USDJPY lifted above Wednesday’s 110.49 high as global stock markets rebounded, causing an unwinding of the Japanese currency’s safe haven premium. EURJPY and AUDJPY, among other Yen crosses, also strengthened strongly. China’s PBoC said today it would use comprehensive policy tools to maintain positive economic developments and stabilize market expectations.

Charts of the Day

Main Macro Events Today

* German Unemployment – Expectations – German jobless numbers are seen falling a further -8K, leaving the jobless rate at a very low 5.2%.

* UK GDP Q1 & Current Account – Expectations – Q1 growth should go unrevised, at 0.1% q/q and 1.2% y/y. The Current Account is expected to come in with a deficit of GBP 18.0 bln in Q1.

* Canadian GDP – Expectations – to rise 0.1% in April after the 0.3% gain in March (m/m, sa).

* BoC Business Outlook Survey – Expectations – The Q2 survey is expected to reveal some trimming to the expansionary outlook, but one that is consistent with ongoing growth in 2018. The report should show further tightening of capacity, with labour shortages on the rise. Well contained inflation expectations are projected, but sentiment will remain in the upper half of the band.

* US PCE & Personal Income – Expectations – Personal Consumption Expenditures is expected to rise slightly to 1.9% in May. Personal Income is expected to rise 0.4% in May , following a 0.3% gain in the month prior.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Trade and tariffs remained in the headlines through Q2 and along with political jitters, caused global consternation. And with the US’s July 6 deadline for collection of additional duties on Chinese products, tariffs will remain the center of attention. Behind the scenes however, US growth has picked up steam as the stimulative effects from deregulation, tax reform and fiscal measures start to take hold and overshadow the noise. While it looks as though Q3 will start off on the same footing as Q2, the big questions for the markets will be whether the trade skirmishes escalate, and whether US momentum can support growth over the rest of the world.

United States: It’s an important week in the US. Along with the July 4 Independence Day holiday, there are the month’s key releases. Additionally, July 6 is the deadline for tariffs on 818 lines of about $34 bln of Chinese goods. The data slate is headlined by the June jobs report, as well as manufacturing and services PMIs, vehicle sales, and trade. The FOMC minutes of the June 12, 13 meeting will provide extra insight on the shift to a more hawkish stance.

The June nonfarm payroll report (Friday) is expected to show a solid 200k increase in jobs after the 223k gain in May, while the jobless rate should hold steady at a low 3.8%. There’s ongoing controversy over the degree of slack in the system. On Monday, the ISM should slip to 58.0 in June, from May’s 58.7. Despite the expected decline, the index remains solid and not too far off from the 14-year high of 60.8 in February. The light vehicle sales (Tuesday) expected to rise to a 17.0 mln rate in June from 16.8 mln in May, with autos at 5.3 mln and trucks at 9.0 mln, versus respective rates of 5.2 and 8.9 mln in May. The May supply – disruption for truck assemblies from a fire at a parts supplier may disrupt truck sales in June and July, though more generally truck sales continue to drive vehicle sales. The May Trade Deficit (Friday) should narrow to -$43.5 bln, from -$46.2 bln in April and a cycle high -$55.5 bln in February, given the Advance Goods Trade Balance narrowing to -$68.2 bln.

Canada: Canada’s data docket contains two key reports that will inform the outlook for the Bank of Canada announcement next week. Employment (Friday) is seen rising 25.0k in June after the 7.5k drop in May and 1.1k dip in April. The unemployment rate is expected to hold at a 40-year low 5.8%. The trade deficit is expected to widen to -C$2.2 bln in May from -C$1.9 bln in April. The June Ivey PMI (Friday) is anticipated to slide to a still expansionary 61.0 from 62.5 in May. Employment and trade in line with estimates would support the expectation that the Bank of Canada will lift rates 25 basis points to 1.50% in the July 11 announcement. Markit Canada manufacturing PMI for June is due on Tuesday. The markets are closed Monday in observation of the Canada Day holiday.

Europe: With the ECB having effectively clarified the policy path well into the second half of next year, and the important June summit out of the way without the new Italian government blowing up the party, the markets should be settling into a slower summer mood in a week that includes largely secondary data releases. So for now, market volatility is likely to continue adding to pressures on the ECB to revamp the rules on re-investment as it prepares to phase out net asset purchases by the end of the year.

Data releases are unlikely to change the overall picture significantly. The final readings on June PMIs are expected to confirm preliminary readings of 55.0 for both the Manufacturing (Monday) as well as the Services reading (Wednesday), which should leave the composite on course to be confirmed at 54.8. Readings still point to ongoing robust growth across both sectors and Markit reported with the preliminary numbers that part of the recent slowdown was indeed due to capacity constraints with delivery times lengthening. Meanwhile, German manufacturing orders (Thursday) are expected to rebound 1.0% m/m from the 2.5% m/m decline in April and industrial production is seen to pick up 0.2% m/m, after -1.0% m/m.

Events include ECBspeak from Weidmann (Thursday) as well as Nouy (Friday) and bond auctions in Spain and France on Thursday.

UK: The calendar brings the June Markit PMI surveys, with the manufacturing PMI (Monday) anticipated at 54.0, down from 54.4 in May. Evidence suggests that the slowing in economic growth across the channel have been crimping export performance in the manufacturing sector. The construction PMI (Tuesday) is expected to arrive with an unchanged 52.5 headline reading, and anticipate the services PMI (Wednesday) to also hold unchanged, at 54.0. In-line data should keep the BoE on its gradualist tightening course, with markets looking for a 25 bp hike in the repo rate at the August MPC meeting.

Japan: The May personal income and PCE (Friday) should show spending contracting further to a -1.7% y/y clip, from the prior -1.3% outcome, another worrying sign from the region.

China: The June Caixin/Markit manufacturing PMI should slip slightly to 51.0 from 51.1. The June services PMI (Wednesday) is penciled in at 52.5 from 52.9. Again such results would add to worries over a slowdown and fears that tariff threats are weighing on sentiment.

Australia: The RBA’s meeting (Tuesday) casts a long shadow over a busy calendar. No change is expected to the current 1.50% setting for the cash rate target as inflation remains low. The rate has been unchanged since the 25 bp cut in August 2016. The economic data docket is full this week. Building permits (Tuesday) are projected to bounce 2.0% in May (m/m, sa) after the 5.0% drop in April. May retail shipment values (Wednesday) are expected to rise 0.2% (m/m, sa) following the 0.4% gain in April. The trade surplus (Wednesday) is seen at A$1.3 bln in May from A$1.0 bln in April.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

European Fixed Income Outlook: A mixed picture on bond markets, while US stock futures recovered earlier losses and are moving higher, in tandem with UK100 futures after markets continued to struggle with trade angst during the Asian session. Germany’s Merkel managed to find a last minute compromise with Interior Minister Seehofer that will prevent a break up of the union parties – at least for now. The controversy over immigration meanwhile is likely to continue not just in Germany, but across Europe. Today’s calendar has Eurozone Retail Sales and PPI as well as the UK Construction PMI.

FX Update: The Dollar majors have remained in narrow ranges, overall, though there has still been some movement of note. USDJPY posted a fresh 6-week high of 111.13 before settling lower. Other Yen crosses also saw similar price action with the backdrop of steadying global stock markets seeing the Yen come under some pressure. China’s PBoC once again allowed the Yuan to weaken, with the USDCNY rate this time rising to an 11-month high above 6.6700. China’s central bank is responding to both the impact of US tariffs and broader weakness in emerging market currencies. The Australian Dollar rallied moderately, partly amid the rebound in stock markets and partly on RBA’s policy statement, which, while remaining distinctly neutral overall, was perhaps a little more sanguine than some market participants had expected regarding the risks stemming from a slower, tariff-afflicted Chinese economy. RBA left the cash rate at 1.50%, as had been widely anticipated. AUDUSD posted a high of 0.7365, a gain of over 30 pips from Monday’s closing levels. EURUSD has lifted back to the 1.1650 area, extending the rebound from yesterday’s 1.1591 low but so far remaining below yesterday’s high.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Asian Market Wrap: Treasury futures declined in thin volumes, while cash markets are shut for a US holiday. Japan’s 30 year yield dropped below 0.7% as Asian market remained shaky, with Chinese Indices continuing to underperform despite the commitment to a stronger Yuan, as the start of the first round of US tariffs on Friday weighs on sentiment. Most Indices managed to come up from lows in the later part of the session and the Nikkei is still down -0.13%, but also up from lows. Oil prices are higher on the day, with the WTI Future trading at USD 74.64 per barrel.

FX Update: The Dollar traded softer, led be declines against the Yen, Australian Dollar and most emerging world economies, which seemed to benefit from China’s steadying of the Yuan today. USDJPY opened in Asia at about 110.58-60, then dipped to a 4-session low of 110.27 before setting around 110.40. Stock markets in Asia mostly declined, following a tech-led drop on Wall Street yesterday. China’s Yuan steadied after declining notably last week, on Monday and Tuesday, amid reports that it was at the direction of Beijing. Most emerging market currencies also gained. AUDUSD posted a 7-session high at 0.7424. A record high reading in the Australian June Services PMI, which jumped 4 points to 63.0, gave the Aussie a bid, along with the firming in the Yuan. EURUSD meanwhile, clawed out a 2-session high of 1.1678. Conditions will be thin and direction commitment limited today with US Markets closed for the 4th of July holiday.

Charts of the Day

Main Macro Events Today

* German Service PMI – Expectations – expected to confirm the preliminary reading of 53.9,which should leave the composite at 54.8.

* Eurozone Service PMI – Expectations –expected to remain unchanged at 22 ,which should leave the composite at 54.8, with a slight bias to the downside.

* UK Service PMI & BoE Speeches- Expectations –is seen steady at 54.0. Events include BoE speeches from Woods and Sarpota as Brexit pressure on the UK mount with May wedged between hard-line Brexiteers and warnings from Brussels that the time for a deal is running out.

* US Bank Holiday – Independence Day

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Asian Market Wrap: 10-year Bund yields are up 1.3 bp at 1.315% in opening trade, the 2-year is up 2.1 bp at -0.652%. 10-year Treasury yields are up 1.6 bp after returning from holiday and strong German manufacturing orders as well as Bloomberg source stories suggesting at least some ECB officials see a rate hike in September/October next year, i.e. earlier than current market pricing, will be adding to pressure especially at the short end this morning. Peripherals are outperforming slightly and GER30 and UK100 futures are higher in line with US futures in opening trade. After the release of German orders at the start of the session, the calendar still has Swiss CPI, BoE’s Carney, as well as ECB’s Weidmann and supply from Spain and France.

FX Update: The Euro is opening Europe firmly, with EURUSD testing the week’s highs at 1.1690-91, EURJPY posting two-day highs above 129.35 and EURCHF ascending into 3-week high territory. The Dollar, outside the case against the Euro, has been trading neutrally, including against most emerging world currencies. The PBoC continued to rein in the yuan, with the offshore USDCNY rate of 6.6478-80 holding below Tuesday’s 11-month low seen at 6.7344. USDJPY continued to orbit the 110.50 level. The stability in currencies belies a heightened state of concern about trade protectionism, with the US on Friday set to implement tariffs on $34 bln of Chinese imports, although equity market weakness, especially in China-focused issues, have taken a whack today.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

The US June jobs report was another “Goldilocks” set of numbers for the markets, drawing back in workers from the ranks of the long-term unemployed. Broadbased strength in employment not only helped Wall Street rally but the surge in the labor force and tame wage gain allowed Treasury yields to drift lower, since the report offered no incentive for the FOMC to deviate from its “gradual pace” of normalization. Looking forward, inflation data will dominate in the week ahead, with the Fed comfortably close to its 2% target now. The Fed will also release its Monetary Policy Report on Friday with Chairman Powell’s key follow-up semi-annual testimony on July 17.

United States: The US Economic calendar will zero in on inflation statistics for the week of July 9. Modest gains in the CPI and PPI are expected, with the y/y readings remaining above the Fed’s 2% target given hard comparisons. The Import Price Index may reveal weakness related to declining oil prices in the month, but export prices should post a modest gain. Consumer Credit (Monday) is projected to rise $12.0 bln in May, following a $9.3 bln gain in April. JOLTS job openings are due (Tuesday). Headline CPI (Wednesday) is expected to rise 0.2% in June, following a similar gain in May, while core prices are estimated to rise 0.2% as well, the same as in May. Wholesale inventories are expected to rise 0.5% in May (Wednesday), as revealed in the advance report, following a 0.1% gain in the prior month, and sales are estimated to rise 0.5% as well, after a 0.8% gain in April. CPI is forecast to rise 0.2% in June (Thursday), following a similar gain in May. Core prices are estimated to rise 0.2% as well, the same as in May. Initial jobless claims are estimated to fall 18k to 213k in the week ended July 7 (Thursday), reflecting an expected early-July drop related to auto retooling, and the Treasury budget gap may hit to -$133 bln in June. A 0.2% decline is expected in the Import Price Index in June (Friday), due to crude oil weakness, following a 0.6% gain in May, while export prices are expected to continue to move up 0.1%.

Fedspeak kicks back into gear with just a week to go before Chairman Powell’s semi-annual testimony, which will be preceded by the Monetary Policy Report (MPR) on Friday, July 13 at 11:00 ET.

Canada: Canada is focused squarely on the BoC meeting (Wednesday), which it is expected to result in a 25 basis point boost to a 1.50% rate setting. The accompanying monetary policy report should be consistent with additional rate increases, but at a gradual pace. The focus will be on Bank’s view on the ongoing trade/tariff issues, labor market slack and the inflation outlook. A housing-heavy data docket will be an afterthought this week. Housing starts (Tuesday) are expected to moderate to a 190.0k pace in June from 195.6k in May. Building permit values are seen dropping 2.0% in May after the 4.6% contraction in April. The New Home Price Index (Thursday) is projected to reveal a 0.1% dip (m/m, sa) in May after the flat reading in April. Existing home sales for June are expected on Friday. The Teranet/National Bank Housing Price Index for June is also scheduled for Thursday.

Europe: ECB tried to inject calm and prevent rate hike expectations from running ahead when it pledged to keep key rates steady through the summer of next year. But with growth indicators confirming that the recovery is not dead yet and inflation jumping higher, officials are now trying to regain control especially over the short end. ECB speakers will be important in this context. President Draghi will testify to the European Parliament in Brussels (Monday). It will be interesting to see whether he backs recent “source” stories suggesting ECB is eyeing the first rate hike in September/October next year, which would also be the last meetings for Draghi as President.

Final Eurozone June inflation data is expected to confirm the German HICP rate (Thursday) at 2.1% y/y. The French reading (Tuesday) also is at a 2.1% y/y rate which should leave the overall Eurozone number (due July 18) on course to be confirmed at 2.0% y/y. German data in particular bounced back strongly with May production and orders figures. Yet, while ongoing political uncertainty and risks of an escalating trade war have weighed on some confidence measures, there is some room for an upside surprise in German ZEW confidence (Tuesday). Still, this is investor confidence data which is more impacted by uncertainties and concerns about political events and at least the latest real sector numbers out of Germany have been very encouraging. Indeed, after German production growth was reported at 2.6% m/m in May, rebounds are expected in French (Tuesday), Italian (Tuesday) and Eurozone Production figures (Thursday). The calendar also has trade data for Germany.

UK: The calendar is fairly quiet in terms of economic releases, highlighted by the June BRC Retail Sales survey (Tuesday), and May Industrial Production and Trade data (also Tuesday).

The government has — after more than two years from vote-to-leave the EU — finally worked out what it wants from a post-Brexit deal with the EU. This was hammered out in a climactic Cabinet meeting on Friday, which saw the hard Brexiteers give up ground to reach a compromise. The government will seek a “EU-UK free trade area which establishes a common rule book for industrial goods and agricultural products,” which essentially means a single market for goods, along with a “facilitated customs arrangement” to address the need for a frictionless border in Ireland. It remains doubtful that the EU will agree to the free market for goods part, however, having maintained that the UK will not be able to cherry pick which parts of the single market to take part in. It also remains uncertain how effective the proposed frictionless customs arrangement will be. There are now only 5 negotiating weeks left until October, when both the EU and UK are looking to have an agreement in place.

Japan: The May Machine Orders (Wednesday) are seen contracting 5.0% m/m, essentially halving the April 10.1% climb. The May Tertiary Industry Index (Wednesday) is pencilled in slipping 0.1% after rising 1.0% in April. June PPI (Wednesday) should warm up to 2.9% y/y from 2.7%. Also slated is the final May reading on Industrial Production (Friday). It declined 0.2% in the preliminary report, after gains of 0.5% in April, 1.4% in March, and 2.0% in February.

China: It’s the June Trade Report (Friday) that will be the focal point. Inflation reports are also due with June CPI and PPI (Tuesday). CPI is expected to accelerate a bit to a 2.0% y/y pace versus 1.8% y/y previously, with PPI rising to 4.5% y/y from 4.1%. June loan growth and new Yuan loans are tentatively due Tuesday as well.

Australia: In Australia, Housing Investment (Wednesday) features on a thin data docket. A 3.0% drop is expected in May after the 1.4% gain in April. RBA Assistant Governor (Financial System) Bullock speaks at the 5th Bund Summit on Fintech from Shanghai, China (Sunday). The RBA held rates steady last week and maintained expectations for no change for an extended period.

New Zealand: Retail Card Spending (Tuesday) is the only release of note and it is expected at a 0.7% gain (m/m) in June after the 0.4% rise in May. At the June meeting, the RBNZ held rates at 1.75% and opened the door to a rate cut if necessary. The next move is expected to be a rate increase. The next meeting is on August 9.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Asian Market Wrap: Long yields continue to climb and 10-year Treasury yields are up 0.7 bp at 2.864%, 10-year JGBs up 0.6 bp at 0.032% as Stock Markets remained in risk on mode during the Asian session. Nikkei gained 1.09% after a strong close on Wall Street and with the earnings season starting to overshadow lingering trade jitters – at least for now. A weaker Yen added Support. The Hang Seng is up 0.36%, but CSI 300 and Shanghai Comp are down -0.20% and -0.11% respectively after their biggest rally in more than 2 years and as Inflation numbers came in higher than anticipated, but also reflecting lingering trade war concerns ahead of the next round of US tariffs due to be confirmed on July 20. Many expect markets to remain volatile ahead of July 20 – the date for the next set of US levies on Chinese imports. US stock futures are higher, however, and oil prices are up and the WTI future is trading at USD 74.29 per barrel.

FX Update: USDJPY has broken above recent range highs and printed a 7-week high at 111.14. EURJPY and other Yen crosses are also up, with EURJPY trading in 7-week high terrain and AUDJPY making 1-month highs. The driver of the yen’s underperformance is the continued rebound in global Stock Markets, although Chinese shares continue to underperform. The solid US jobs report last Friday and expectations for a strong corporate earnings season have been buoying equities, and while the shift toward trade protectionism remains at the top of the worry list of investors, the level of implemented tariffs so far is small in the scheme of things. BoJ Governor Kuroda yesterday repeated that the central bank will remain committed to ultra-accommodative monetary policy, including yield-curve control, until inflation hits the 2% target. USDJPY has Support at 110.88-90 while the May-21 high at 111.39, which is the highest level seen since mid January, provides an upside waypoint.

Charts of the Day

Main Macro Events Today

* UK Production Data – Expectations – Industrial production expected to rebound by 0.5% m/m after contracting by 0.8% m/m in the month prior, while we see the narrower manufacturing output figure rising 0.8% m/m after declining by 1.4% m/m in April.
* UK Trade Balance – Expectations – expected to fall to 11.9B from 14.0B last month.

* German ZEW – Expectations – July investor sentiment reading anticipated at -18.0 down from -16.1 in June, confirming that pessimists still outnumber optimists.

* Canadian Housing Starts – Expectations – expected to rebound to a 210.0k pace in June after falling to 195.6k in May from 216.8k in April.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

European Fixed Income Outlook: The 10-year Bund yield is trading at 0.3598% as of 06:12 GMT, down from a close of 0.3672% on Tuesday. Safe haven flows are once again underpinning core Bond Markets and 10-year Treasury yields are down 1.5 bp at 2.834%, after a Trump announced a fresh round of tariffs on Chinese imports and reloaded the trade war threat. Stock markets sold off across Asia and European Futures are also heading south in tandem with US Futures. With little on the European data calendar, trade jitters are likely to remain the main focus in markets, although many expect investors to quickly start to focus on the earnings season again after the initial sharp reaction. Germany and Italy are set to sell Bonds today and there are a number of ECB speakers including president Draghi.

FX Update: The Dollar majors have traded in narrow ranges so far today amid a tone of heightened caution as stock markets take a fresh tumble, led by Chinese bourses, due to another ratchet in trade warning tensions between the US and China. US Index Futures have also seen hefty declines. USDJPY has settled lower, near the 111.0 mark, after printing a 7-week high at 111.35 yesterday, while AUDJPY, a relatively high beta cross, is down quite sharply, by over 0.6%. AUDUSD is down by a similar magnitude. Most emerging market currencies have also come under pressure against the Dollar, giving back some of their rebound gains seen in recent sessions. EURUSD has lifted back above 1.1700, rebounding from yesterday’s three-session low at 1.1690. The pair has been trading in a broadly sideways, at times choppy, range for over a month now, and more of the same is anticipated.

Charts of the Day

Main Macro Events Today

* ECB speeches –ECB President Draghi delivers a speech at the ECB Statistics Conference in Frankfurt, along with Praet and Lautenschläger.

* US PPI and Core – Expectations – Headline PPI is expected to rise 0.2% in June, following a similar gain in May, while core prices are estimated to rise 0.2% as well, the same as in May.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Asian Market Wrap: Long yields moved higher as risk appetite improved. The 10-year Treasury yield is up 0.9 bp at 2.858% and the 10-year JGB yield is up 0.3 bp at 0.032%. Asian stock markets meanwhile recovered from yesterday’s slump, with Chinese markets outperforming as trade jitters abated somewhat as Chinese and U.S. officials reportedly flagged the prospect of returning to talks, with China’s Vice Minister of Commerce calling for bilateral negotiations to resolve the conflict. BoK’s decision to leave the 7-day repo rate unchanged at 1.50%, as expected had little impact. Nikkei and Topix are up 0.54% and 1.23% respectively, with a weaker Yen underpinning gains. The Hang Seng gained 1.00% and the CSI 300 is up 2.57%. US Futures are moving higher and the WTI Future is up from a low of EUR 70.60, but at USD 70.80 still considerably below recent levels.

German June HICP confirmed at 2.1% y/y, as expected. There were no real surprises in the data, which confirmed that higher energy prices are a key reason for the overshoot in the headline rate above ECB’s target. Heating oil prices rose 30.3% y/y, after 24.3% y/y in the previous month and petrol price inflation accelerated to 11.3% y/y from 8.2% y/y. Still, with the labour market looking tight and companies facing capacity constraints the room for a second round of effects to emerge is clearly larger than it was a year ago, which may explain why some at the ECB are nervous about markets pushing out rate hike expectations too far back.

Charts of the Day

Main Macro Events Today

* BOE Credit Conditions Survey

* ECB Monetary Policy Meeting Accounts

* US CPI and Core – Expectations – forecast to rise 0.2% in June, following a similar gain in May. Core prices are estimated to rise 0.2% as well, the same as in May.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.